Pineland Co-op & Lake Country Co-op — Amalgamation Frequently Asked Questions
Arriving at the decision to consider amalgamation was not a short-term process. In early 2017, both boards had the vision of strengthening their respective Co-op by partnering to provide enhanced benefits to all members. Since then, Pineland Co-op has had a partnership with Lake Country Co-op where administrative services were supplemented. Also, both boards have reviewed a feasibility study planning the proposed partnership through amalgamation, and found that the benefits to members were very positive. The Board of Directors from both Co-ops agreed to pursue the opportunity to partner through amalgamation.
2. How will Pineland Co-op and Lake Country Co-op be Better Together?
Co-ops were built on the concept of working together to help serve their communities better. That founding principle remains at the heart of this partnership, even as the world around us continues to change. By partnering together, our two Co-ops will be more resilient to increasing competition, and we will have more resources and talent to pool together in order to innovate. Most importantly we will offer our members the ability to use their Co-op number across a much broader geographic area—offering them even greater opportunity to realize their Lifetime Member Benefits.
3. Why do the Boards feel that they need to amalgamate?
Today’s retail landscape continues to get more complex, and our competitors are continuing to expand and consolidate. Adding value for current and future members was at the forefront of this decision, but this also positions our Co-ops to remain competitive, relevant, and successful in an ever-changing market. By partnering together with a neighbouring Co-op with shared values, our Co-ops will become Better Together.
4. Will I lose any of my equity in the Pineland Co-op?
No; equity that has been accumulated in either Co-op will not be lost. Individual member equity will automatically be carried forward. If you are a member who holds membership at both Co-ops, any and all equity would be combined. Co-op members are owners too, and this is an important aspect of what makes cooperatives so unique. Under Pineland’s current equity policy, annual general repayments are paid out in a tiered formula based on the member’s amount of equity. Lake Country’s current equity policy is also a tiered formula. Also, Pineland Co-op pays out equity at 70 years of age. Lake Country Co-op starts equity pay out at age 65, and it is gradually paid out over five years.
This will mean Pineland members aged 65-69 will be eligible for equity payouts amounting to approximately $2.0M upon the effective date of amalgamation.
5. Financially, how much are our Co-ops going to save by amalgamating?
Creating a win/win partnership which was a benefit to all members of each Co-op was reviewed thoroughly at each stage of the feasibility studies and throughout partnership talks. This process revealed that there would be a savings of approximately $900,000 per year because of increased efficiencies. Also, if the proposed amalgamation occurs, the newly combined Co-op would receive a portion of Pineland Co-op’s Federated Co-operatives Limited (FCL) equity in cash. This one-time cash benefit equates to $6.75 million, to be dedicated for Pineland over-age equity payouts and future projects in the Nipawin/Choiceland area.
6. Will a single Co-op be able to continue Member Patronage and Cash-Back programs?
The feasibility study shows that the amalgamated Co-op will be in a strong financial position to continue our emphasis on our Equity and Cash Back program to our members. Equity programs from both retails are in a strong position and would be expected to continue following an amalgamation. In recent years, member equity allocations have been higher at Lake Country which presents the opportunity for Pineland members to earn more equity.
7. Will I be able to keep my existing Co-op Number?
Members from the Pineland Co-op would have their membership numbers brought up to six digits by adding a digit. In some instances, there may be individuals that hold memberships in both Co-ops. In this case members could choose which one to keep and equity would be combined. Members with charge accounts will not be required to reapply for credit upon amalgamation.
8. Does the amalgamation benefit members from both Co-ops?
Absolutely. All members will benefit as a result of this partnership through amalgamation. By partnering, we will realize benefits from increased sales, increased margins and greater net savings. We will be able to offer all members a wider range of products and services, some of which are not currently available in either retail. This will also provide some communities with products and services that might not have been available in their communities previously. The biggest benefit to members from both Co-ops would be the ability to use one Co-op number in 18 communities and at 56 different locations.
9. Will there be any lost jobs because of the amalgamation?
No, there will be no jobs lost as a result of the partnership through amalgamation. The feasibility is based on no one losing their job. All team members will retain their same positions in the newly formed Co-op. Team members as employees from both Co-ops will operate under one company, with one set of policies and procedures to contribute to a safe, supportive work environment with a full set of employee benefits. The proposed amalgamation will result in long term job creation through our sustainable growth strategy. There are also no projected store closures. The feasibility study was also based on both Choiceland and Nipawin retaining their retail locations.
10. Community Commitment?
Both Co-ops hold very similar values and support community causes at a similar level. The Pineland team will continue to be involved in the community at the same level, supporting the same causes.
11. Will my cash refund from patronage or equity programs change?
Like Pineland Co-op’s current policy, Lake Country Co-op also does not have an equity cap. Currently cash allocations are paid as follows: 20% will be paid in cash when equity is less than $20,000 and 30% paid in cash when equity is greater than $20,000. With Lake Country allocation rates, Pineland members will earn approximately 50% more equity annually. (See attached example.)
12. What is the timeline for the decision on amalgamation?
Both Co-ops operate with a delegate structure meaning the delegates for both Co-ops are responsible to vote on amalgamation. The meetings dates for voting have not yet been determined and will only be held after a member consultation process.
As members you are entitled to have a say in this process. There are a number of information days planned where you can come out and ask a Board member or the General Manager any question. The dates and locations are as follows:
- Choiceland CornerMonday December 9, 2019 3 pm to 6 pm
- Nipawin Food Store Wednesday December 11, 2019 and Thursday December 12, 2019 3 pm to 6 pm
- Nipawin Home Centre Wednesday December 18, 2019 and Thursday December 19, 2019 3 pm to 6 pm
- Nipawin Evergreen Centre Thursday, January 9, 2020 Member Information Meeting 7:30 pm
13. How will the Board of Directors of Pineland Co-op & Lake Country Co-op join together?
The Board of Directors will increase from six to eight members pending delegate approval. The two additional members will come from the current elected body from Pineland Co-op; one will serve a two-year term and the other will serve a three-year term. Following their initial terms, the regular director electoral process would be followed. Any director is eligible for re-election at the end of each term; there is no limit to the number of terms.
Also, Pineland would receive representation of six delegates from the existing delegate body; three from the Nipawin area and three from the Choiceland area. Upon expiry of their terms, delegates would then be elected by members in each community.
For more information on the proposed retail partnership, please contact:
President of the Board of Directors
Pineland Co-op (306) 862-7765
Pineland Co-op (306) 862-6743
Pineland Co-op (306) 862-4668
Directors: Morley Doerksen, Kevin Lockwood, Arlie Olson, Morris Nycholat, Dona Hoppe, Betty Rowlett, Lori Burka
Delegates: Kevin Adrian, Greg Youzwa, Wendell Head, Spenser Staffen, Carson Shymanski, Marcel Head, Zach Youzwa, Aaron Baxter, Bonnie Seerey